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Posted by on Apr 18, 2010 in Economy, In The News, Markets, TG Roundup, USA

“Not My Fault”

President Clinton chimed in about his administration’s failure to regulate derivatives and restrain Wall Street’s reckless behavior.

In that video bit, he essentially said, “It is not my fault. Even if I tried to do something, Republicans would have blocked anyway. Furthermore, Bush made it worse.” The last two lines are essentially true. But, my take is Clinton gets as much blame as Bush and the Republicans. His administration championed bailouts. Add to that, he looked the other way even when the first major warning shot was fired in 1998 when LTCM blew up. At that time, he had more than 2 years left in his presidency. Yet, he went with the repeal of Glass Steagal Act, which was championed by Phil Grahm and Larry Summers. This is rewriting history – plain and simple.

Mr. President, you cannot simply claim credit for all that is good and pass the buck for all else that failed. You are a hypocrite.

Jesse spoke my mind on several points (emphasis mine):

The hypocrisy of the oligarchs knows no bounds.

Bill Clinton conveniently forgets the hundreds of millions of campaign contributions that he and Hillary so famously raised from Wall Street for the Democrats. They taught their party, always a bit chaotic but left dispirited after the Kennedy assassinations, that ‘greed is good.,’ and it certainly pays well. You can put up $1000 and obtain a return of $100,000 in a futures market of which you know nothing, and do nothing, if you know the right people. The price of their perfidy was the overturning of Glass-Steagall and the planting of the seeds of the bubbles and financial crises that the US is still experiencing today. [I slightly disagree with Jesse. Seeds were sown when Clinton started bailouts. The tree sprouted when LTCM was bailed out. Repeal of Glass-Steagall act was like killing all other vegetation to help a weed grow into a tree. Bush administration policies acted as a fertilizer for hyper growth of this monster of a tree.]

There is no doubt that George W. Bush hatched the egg, and nurtured it into a ferocious buzzard of fraud and greed. But Bill Clinton laid the egg. And Obama continues to feed the beast, and maintains the very same advisors that Clinton blames in the Rubin proteges Larry Summers and Tim Geithner.

Americans embrace the “CEO defense.” Hey, everyone makes mistakes. All you have to do is say, “Oops, I made a mistake” and all is forgiven, from Greenspan to Clinton.

When you make a big enough mistake, or a series of mistakes, and profit by it, and your actions have the stench of corruption, you should be sacked, disgraced, and shunned for a decent period of time.

The elite media is in a panic. I had the opportunity to watch “The Chris Matthews Show” and the comparisons of Tim McVeigh, Ruby Ridge, and Waco to the Tea Party Movement went way over the top, suggesting the possibility of imminent crisis. I can almost see the over-reaction and paranoia coming over the horizon.

There is a tremendous temptation for the old media, and even the bloggers, to go along to get along, to deal only with the ‘safe subjects’ and reforms, and to play the party line for the status quo. It provides the admittance to the powers, and the venues where they pose for the press. It brings connections and praise from those in power. All you have to do is say thing, or deal with this legitimate problem but in the way we suggest. And ignore these other things.

It does happen. It is not always obvious, but it is there. And if you say ‘no’ you are attacked or shunned. And being your own person, not taking ‘sides’ in distorting the facts in one direction or the other, puts one is in the ‘grays’ always caught between black and white. It sounds noble, but it is a lonely watch.

I am absolutely no follower or even admirer of Sarah Palin. I think she is a shameless opportunist playing to the crowd, saying whatever will deliver money and power. She is the Bill Clinton of the right, or even worse, a Huey Long. And the Tea Party crowd is badly in need of adult supervision. And Fox News is too often blatant propaganda, and pandering to and inflaming extremism for commercial gain. I often suspect that they are part of the Hegelian dialectic, the means of defusing legitimate reform into ineffective noise.

Bear in mind I was a conservative before ‘conservatism’ was cool, going back to the Goldwater movement and the traditional and principal conservatism embodied by Edmund Burke and James Burnham. These Fox conservatives for the most part are the worst of breed. But such is the quality of discourse and action in the States as it declines.

But having said all that, the grievances are legitimate, the Congress is corrupted by the current campaign contribution laws, the US financial system is rife with fraud, the economy is dysfunctional as a price discovery and capital allocation system, and the inequality of power and wealth is a significant obstacle to progress and domestic tranquility.

Obama is leaving a leadership vacuum by his indolent style of leading by indirection, trying to build a consensus to do the right thing, teaching the Congress to fish. I have great sympathy for the challenge he faces. The problem is that the Congress cannot even find the stream for hitting one another with their poles. There are serious and fundamental flaws in the political and economic structure in the US that become more acute and systemically threatening with each false recovery.

How all this resolves is difficult to see. A new financial crisis will almost certainly bring things to a head, but it remains to be seen how America will react to the realization that they have been badly used, and are expected to suffer, in some cases greatly, for it. But before America the jackals appear to be descending on Europe. And Europe, and especially the UK, may provide us with some insight into the future of the world’s greatest but declining superpower.